By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- After briefly dipping into negative
territory, European stock markets moved firmly higher on Friday
after U.S. data showed the unemployment rate fell in January,
although the nonfarm-payrolls report missed forecasts.
The Stoxx Europe 600 index rose 0.7% at 325.09, building on
gains from Thursday, when the benchmark posted its biggest advance
since Dec. 19. The rally on Thursday came after the European
Central Bank left its key lending rate at a record low of 0.25%,
although ECB President Mario Draghi reiterated a pledge to take
further easing action if needed.
The Stoxx 600 wobbled around the flat line on Friday immediately
after U.S. jobs data painted a mixed picture of the country's labor
market, but the benchmark ended up moving firmly higher. The
nonfarm-payrolls report showed 113,000 jobs were added to the
economy in January, falling short of the 190,000 expected by
economists polled by MarketWatch. Meanwhile, the unemployment rate
dropped to 6.6% -- the lowest since October 2008--from 6.7%, while
the participation rate edged up to 63% from 62.8%.
"Recent economic data has been softer than expected, but the
degree to which it was attributable to poor weather conditions
remains unclear. While markets have reacted, it's too soon to
conclude that the data signals anything more than a temporary
weakening in the pace of growth," said Jim Baird, chief investment
officer at Plante Moran Financial Advisors, in a note.
He also pointed out that the jobs report in itself is unlikely
to be enough to deter the Federal Reserve to continue tapering its
asset purchases. The Fed started reducing its asset-purchase
program in December and made further cuts to it in January, leaving
the monthly purchases at $65 billion.
Among notable movers in Friday's action in Europe, shares of
ArcelorMittal rose 3.8% after the French steelmaker said its loss
narrowed in the fourth quarter, helped by cost saving and a rise in
steel and iron-ore shipments. Peer firm ThyssenKrupp AG gained
0.8%.
On a more downbeat note, shares of Skanska AB dropped 2.6% after
the Swedish construction firm reported fourth-quarter profit and
revenue below analyst expectations.
Germany's DAX 30 index was up 0.4% to 9,295.25 and the U.K.'s
FTSE 100 index rose 0.4% to 6,581.32. France's CAC 40 index gained
0.8% to 4,221.16.
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